TEST BANK For Louwers, Auditing and Assurance Services 9th Edition, by Louwers, Bagley, Blay, Strawser, and Thibodeau, Verified Chapters 1 - 12, Complete Newest Version

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, Test Bank for Auditing & Assurance Services 9th
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Edition by Timothy Louwers, Jerry Strawser
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Chap 01 9e
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Answers Included pl




1) The audit objective that all transactions and accounts that should be presented in the
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financial statements are in fact included is related to which of the PCAOB assertions?
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A) Existence

B) Rights and obligations pl pl




C) Completeness

D) Valuation




2) Cutoff tests designed to detect purchases made before the end of the year that
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pl have been recorded in the subsequent year provide assurance about
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pl management's assertion of pl pl




A) presentation and disclosure. pl pl




B) completeness.

C) rights and obligations. pl pl




D) existence.




3) During an audit of an entity's stockholders' equity accounts, the auditor determines
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pl whether there are restrictions on retained earnings resulting from loans, agreements, or
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pl state law. This audit procedure most likely is intended to verify management's assertion
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pl of
A) existence or occurrence. pl pl




B) completeness.

C) valuation or allocation. pl pl




D) presentation and disclosure. pl pl




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,4) The confirmation of an account payable balance selected from the general ledger
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provides primary evidence regarding which management assertion?
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A) Completeness

B) Valuation

C) Allocation

D) Existence




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, 5) What type of evidence would provide the highest level of assurance in an
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pl attestation engagement? pl




A) Evidence secured solely from within the entity.
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B) Evidence obtained from independent sources.
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C) Evidence obtained indirectly. pl pl




D) Evidence obtained from multiple internal inquiries.
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6) Which of the following management assertions is an auditor most likely testing if the
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audit objective states that all inventory on hand is reflected in the ending inventory
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pl balance?
A) The entity has rights to the inventory.
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B) Inventory is properly valued. pl pl pl




C) Inventory is properly presented in the financial statements.
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D) Inventory is complete. pl pl




7) An auditor traces the serial numbers on equipment to a nonissuer's subledger. Which
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pl of the following management assertions is supported by this test?
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A) Valuation and allocation pl pl




B) Completeness

C) Rights and obligations pl pl




D) Presentation and disclosure pl pl




8) An auditor has substantial doubt about the entity's ability to continue as a going concern
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pl for a reasonable period of time because of negative cash flows and working capital
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pl deficiencies. Under these circumstances, the auditor would be most concerned about
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pl the
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